The Bottom Line: Unfortunate Side Effects of Capitalist Culture

By Arthur McGovern

This monograph explores the role of culture in modern societies and the side effects that result when that role is distorted. The basic premise of this book is that many of the dominant cultural characteristics of modern life, like the ideologies and values associated with materialism and consumer capitalism, are cultural phenomena with influenc

• Language: English
• Publisher: Vernon Art and Science Inc.
• Release date: Jun 16, 2017
• ISBN: 9781622732845

Book preview

The Bottom Line

Unfortunate Side Effects of Capitalist Culture

Arthur McGovern

Nichols College

Vernon Series in Critical Perspectives on Social Science

Copyright © 2017 Vernon Press, an imprint of Vernon Art and Science Inc, on behalf of the author.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Vernon Art and Science Inc.

www.vernonpress.com

Vernon Series in Critical Perspectives on Social Science

Library of Congress Control Number: 2016959069

ISBN: 978-1-62273-284-5

Product and company names mentioned in this work are the trademarks of their respective owners. While every care has been taken in preparing this work, neither the authors nor Vernon Art and Science Inc. may be held responsible for any loss or damage caused or alleged to be caused directly or indirectly by the information contained in it.

Table of Contents

Chapter 1      Capitalism and society

Introduction

Market Logic

Modernity and the Rise of Modern Problems

Technocracy and Instrumentality

Colonization by the Capitalist Market

Money

Alienation

Summary Thoughts

Chapter 2      The Role of Culture

Culture

Frames and Ideas

The Strategic Use of Framing

Ideologies 

Capitalism as Ideology

Individualism

Homo Economicus: The Ideal Man

Summary Thoughts

Chapter 3      The Power and Problems of Capitalism

Winners and Losers

Historical Context

Market versus State Capitalism

Neoliberalism, or the Sad State of American State Capitalism

Capitalism and Social Justice

Externalities

A Global Issue

Perverse Industries

The Illness Industry

Big Pharma and Little Kids

For-Profit Law Enforcement

Summary Thoughts

Chapter 4      Consumption Problems

Permissive Politics

From Puritanism to Consumerism

The Symbolism of Consumption

Consumer Identity as Social Identity

Economic intrusions

Marketing and Manipulation

Commodifying Culture

Anomie

Summary Thoughts

Chapter 5      Manipulation, Mass Media, and Democracy

Democracy and the Public Sphere

Media and the Public Sphere

The Media and Elitism

Elitism

Knowledge and Power

Passive Democracy and Political Illusions

Illusions of Representation

Illusions of Public Participation

Summary Thoughts

Chapter 6      Why Do These Problems Persist?

Educational Weakness

Unhelpful Biases

Reactionary Populism

Social Conservatism & Nostalgia

Concluding Thoughts

References

Index

Capitalism and society

Introduction

This book is about the influence of the capitalist economic system on cultural values and rules here and abroad. One basic assumption that informs this work is that the globalized economic system is based on rational, but necessarily amoral goals and values, while the social and cultural world of human interactions is not. For example, remember when you were a child you learned that all human life was precious? Well, how precious? The answer matters and it’s not useful to simply claim that it’s priceless. For one thing, the value determines how much spending the government will require from businesses in the form of regulations and safety standards to prevent a human death. This value is calculated by many government agencies in the U.S. and varies, but has generally increased over time. In 2011, for example, the U.S. Transportation Department valued a human life at around $6 million to justify new regulations for the automotive industry (Applebaum, 2011). Businesses also make these types of calculations, but often use different valuations and for other purposes. One American car manufacturer, for example, estimated that a human life was worth about $200,000, in the context of a wrongful death associated with their product. In that case, one of the largest American auto manufacturers knew for several decades that the placement of the fuel tank in one particular model created an unreasonable risk of exploding in the event of a rear collision (Geyelin, 1999). Internal memos released into evidence in 1998 showed that the company estimated that deaths resulting from post-collision fuel-tank fires would cost the company $2.40 per car, based on an estimate that each life has a value of $200,000. Other memos showed that the company had developed an improved design for protecting the gas tank in collisions, but would cost the company $8.59 per car. The company executives decided not to make the improvement.

We recognize that corporations are guided by rational values and tend to make these kinds of quantifiable calculations in order to reduce risk, manage costs, generate profits, and promote growth. But if unchecked, such analyses suggest a dark and dangerous future when many pro-business advocates argue against any regulations at all. The problem here is not capitalism as an economic system – it is surely the most efficient system for the production and distribution of goods and services. But the economic system has no role to play in the civic, moral, or personal circumstances of human life without degrading those circumstances. The question posed by many scholars like the philosopher Michael Sandel is whether some aspects of human life are immune to economic calculation. In other words, whether there are some things that money can’t buy (Sandel, 2012). For example, during the AIDS epidemic in the 1980s, entrepreneurs saw an opportunity to capitalize on the high mortality rates among victims by investing in viatical settlements. Viatical settlements involve the sale of a person’s life insurance policy once they become chronically or terminally ill. Basically, an insured victim gets an immediate cash payout by naming the investor as the beneficiary of the policy, and the investor agrees to pay for medical care until the victim’s death. In 1989, two investment firms specifically targeted individuals with advanced cases of AIDS for viatical settlements; by 1994, the industry had grown to some 60 firms (Atkinson & Gilkeson, 1998). The risk for the investor was how long the AIDS victim lived; the longer they survived the less profit the investor would realize. In this industry, the inescapable conclusion is that the investor has a financial interest in the prompt death of the insured. There have been some phenomenal returns, and there have been some horror stories where people live longer, said the president of one viatical company (quoted in Sandel, 2012). My argument isn’t with the fact that this happens but that too many of us consider this to be a normal part of life. My concern is that if the market continues to rationalize these sorts of relationships between people, where one person’s illness is another person’s investment opportunity, then the logical conclusions are harrowing: Free markets for kidneys and other organs, various forms of slavery or indentured servitude, predatory for-profit healthcare. The problem is that the economic marketplace is morally neutral at best, since value is calculated in monetary terms, and this means that the further the market reaches into our civic and personal spaces, the less influence that moral and social values will have.  This, I contend, is just one of the unfortunate side-effects of capitalist culture.

I argue in this book that the globalized capitalist economic system has become increasingly efficient in terms of scale and scope, but has also become less humane in many regards; less connected to human needs and concerns. It is an amoral system, and concerned with profits and growth, even when it tries to convince us of its beneficence and humanity. The general premise of this book is that the globalized capitalist economic system, dominated by powerful corporations, is guided by instrumental rather than moral values, largely unconstrained, increasingly intrusive, and socio-politically influential enough to alter our cultural rules and values in ways that are problematic at best. I also emphasize that the blame for these outcomes is not simply due to the capitalist economic system but because of its development alongside a process described as the rationalization of society, an evolutionary process that began during the Industrial Revolution and continues today. It is the side-effects of this combination of capitalism and rationalism, the combination of science and technology used to maximize capitalist goals, that are too often damaging for the world and its people. In this book, we will explore these issues and their implications.

Of particular concern is the encroachment of economic interests into areas of human society that traditionally have been free from this type of encroachment, or at least only minimally influenced by profit motives; areas such as scientific research, the justice system, and the personal social spaces in which we live, including even our family relationships. I suggest that there is a slow but steady intrusion into these areas of human life that were once considered off-limits to naked economic incentives and calculations. In a sense, the idea of mission creep, the gradual expansion of objectives during the course of a military operation or bureaucratic goal, is similar to what I call market creep, which is the gradual intrusion of economic activity into new markets that were previously considered non-economic in nature. This intrusion is the natural result of the economic system’s relentless need for expansion and is a completely trivial characteristic of capitalism as such. However, this process does not necessarily involve any concern with social responsibility or public welfare, which means that the economic system is essentially penetrating the cultural barriers that have traditionally separated economic from non-economic realms of human life. This intrusion puts even the idea of America as a free and democratic society increasingly at risk, as economic stakeholders meddle in the political and cultural areas of society in ever more creative ways to further their own enrichment, sometimes at the expense of the public.

Furthermore, the vast capitalist economic system is in many ways increasingly disconnected or disembedded from the contexts and regulations of traditional social relations. Most of us remember when Mitt Romney, the 2012 Republican presidential nominee, claimed that corporations are people. I suspect that he was attempting to humanize the face of corporations in general, but his words reminded many of us of the strange situation in which corporations have various rights and privileges but remain relatively free from the corresponding obligations and sanctions that constrain individual human actions. And if corporations are people, then they are extremely powerful people, since the Supreme Court’s Citizen’s United ruling recognized money as speech, allowing corporations to spend virtually unlimited amounts of money to support their preferred candidates in political elections. In fact, the economic power concentrated in the hands of nongovernment economic stakeholders in pursuit of profit creates a number of dangerous problems. According to the Polish sociologist Zygmunt Bauman, for example, we are currently suffering a kind of existential crisis in western societies, one in which power, the ability to do things, has become divorced from politics, which is the ability to decide how things should be done (2013).

On the one hand, there are powers liberated from political control, while on the other hand, we have politics that is suffering from a chronic shortage of power… power released from political control is capable of guiding itself by its own interests (2013).

These developments lead to the conclusion that the economic system is in some ways fully entangled in our day to day lives in ways that are troubling, but at the same time it is unconstrained by many of our social rules and values. This is not a new phenomenon, and many social theorists have warned about this problem since the time of the Industrial Revolution, but few societies have figured out how to solve this problem without sacrificing either civil liberties or the benefits of technical innovation. The globalized economic system is ultimately made up of individuals exercising their rights around the world, and this freedom has led to remarkable creativity. But in some ways, the economic system has created an alternate reality for itself, where freedom equates to an insatiable quest for profit, and innovation is often aimed at developing more successful forms of influence over an unsuspecting public. As the French sociologist Pierre Bourdieu described it, modern evolution enabled the economy eventually to be constituted as… a separate universe, governed by its own laws (the laws of self-interested calculation and unfettered competition for profit) (2005, p. 7).

Market Logic

Worse than a system that is entangled in our lives yet exempt from our social rules and values, however, is one that is predatory, entangled, and exempt. Consider, for example, the idea of prison privatization. What would it mean for a country that already imprisons more of its citizens than any other country on Earth to establish a for-profit prison system, where corporations and wealthy investors try to maximize profits by incarcerating as many people as possible while minimizing the costs? Sounds scary, right? But it’s already happening, right here in America. The private prison industry has been around since the late 1980s but since then has consolidated to the point that only four companies control over 90% of the business (Fields, 2011). In fact, some critics point out that the market is now effectively an oligopoly. As an example of a growing trend, in 2011 a Cleveland newspaper reported that Ohio had sold one of its state prisons to Corrections Corporation of America (CCA), the largest of the for-profit enterprises (Fields, 2011). As part of the agreement, according to the report, the state guaranteed a minimum occupancy rate of 90% for at least three months or would have to pay stiff penalty fees to CCA. In fact, several states have had similar agreements with these companies, with minimum occupancy rates of more than 90%. What are the implications of a system where states are being confronted with choices such as whether to imprison more people to meet incarceration quotas or pay penalties to private companies? The solution for Ohio was apparently to increase incarcerations. An independent investigation by the Ohio chapter of the American Civil Liberties Union in 2013 found that several courts in Ohio started jailing people when they failed to pay their criminal fines (Alcuohio.org, 2013). This is a modern-day version of debtors' prison, according to the ACLU report. The use of debtors' prison is an outdated and destructive practice that has wreaked havoc upon the lives of… thousands… throughout Ohio. The conditions in that particular Ohio prison also degraded, possibly due to the revenue-enhancing efforts of the private owners. Within a year of its privatization, according to the ACLU, the prison failed several inspections, and the investigation found broken facilities, overcrowding, and a forty percent increase in violence in the prison (2013).

Even worse, the for-profit prison concept leads to new forms of corruption. What does it say about our society when judges receive millions of dollars in kickbacks from for-profit prison companies for routinely sending children as young as ten to private youth detention centers for crimes like trespassing in an empty building or making fun of a school principal via social media? Yes, that happened too. Two former juvenile court judges were convicted in 2009 of racketeering in a case where the judges sent thousands of youth offenders to for-profit detention centers in Pennsylvania in exchange for millions of dollars in illicit payments from the owners of those detention centers (Tavernise & Hurdle, 2011).

The for-profit prison model may represent a particularly extreme form of economic innovation. But as a more mainstream example, consider the for-profit healthcare industry in America. It is well established that Americans pay more for their healthcare than any other country in the world, even though American health outcomes are no better than in other countries (OECD, 2013). The healthcare industry in America can justifiably be called an illness industry, since the industry profits from charging sick people as much as possible for medicines and procedures. A New York Times article reported some of the exaggerated prices Americans pay for vital asthma medicines, for example.

Pulmicort, a steroid inhaler, generally retails for over $175 in the U.S., while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients… Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year… costs under $7 in Europe, where it is available over the counter (Rosenthal, 2013).

These price differences may make good business sense, corporations want to increase profits whenever possible, but in the case of healthcare we are dealing with a public good and life-or-death issues for millions of people. In such a situation, putting profits ahead of the public good on such a basic level violates our shared human values and erodes the social bonds that connect us. Recent news coverage has pointed to the dramatic price increases in essential medications like the epinephrine injectors needed by people with allergies, which increased six hundred percent since 2008, and insulin, needed by over six million diabetics in America alone, which has increased 700% in 20 years and has never been sold in generic form. In fact, even doctors who benefit from the American medical model are finding the need to warn against its excesses. For example, in a New York Times op-ed from 2014, two physicians at Harvard Medical School warned, …financial forces largely hidden from the public are beginning to corrupt care and undermine the bond of trust between doctors and patients (Hartzband & Groopman, 2014).

Cases like these point to more than simple economic propositions. The fact that many of us would consider the for-profit prison model an acceptable and even normal business innovation, or that American businesses sell asthma medications for thirty times more than what people in other countries pay, are indications of a deeper cultural issue. This is an issue of values, cultural resources that we rely on to differentiate right from wrong, and these values can be manipulated and altered by forces antagonistic to our most cherished social goals. In chapter 2 I explore the cultural and psychological components that make these manipulations possible. In Chapter 3 I explore the history of capitalism and the problems inherent with some of its aspects. But I want to be clear that I am not criticizing entrepreneurial success. Earning money through innovative business enterprises clearly is an acceptable and even admirable pursuit. However, those pursuits must be within the various boundaries created by our common values. But both these examples represent predatory economic strategies that allow business interests to profit from the poor, the socially marginalized, and the sick. These "customers’ have little if any choice in the matter. Economic enterprises like for-profit prisons and predatory pharmaceutical corporations therefore represent the growing domination of certain cultural perspectives that benefit specific economic interests within society, even as the results of those benefits do harm to the larger community. My point is that the justifications for these economic developments are first rationalized and then normalized within the larger community through the power of mass media, political pressure, and even ideology, so that economic incentives and activities that were once considered unacceptable are now considered equal to or even elevated over other social concerns.

In addition to the perverse incentives and potential harm that specifically predatory business practices represent, there are significant problems with the most basic assumptions of consumption-based economies. The idea that a rising economic tide would lift all boats, to paraphrase John F. Kennedy, requires economic expansion and growth. Consumerism, the celebration of consumption and materialism that has become commonplace in our society, echoes the need for newer, faster, better, but this is a social phenomenon driven by an economic agenda, despite the fact that the traditional cultural values here in America were based on thrift and self-sufficiency.  Later in this chapter, I describe the rise of rationalism and its implications for modern societies in terms of marketing and money. In Chapter 3 I will delve deeply into the processes by which corporate businesses began to transform American society into a society preoccupied with consumption - with comfort and bodily well-being, luxury, and acquisition – by promoting the idea that consumption equated to good citizenship. But for now, we should simply point out that the long-range implications of consumerism in general are a mixed blessing at best, and can be potentially devastating if they are not regulated and counterbalanced. For example, a 1998 report from the United Nations Development Program (UNDP) had this to say:

Today’s consumption is undermining the environmental resource base. It is exacerbating inequalities… If the trends continue without change — not redistributing from high-income to low-income consumers, not shifting from polluting to cleaner goods and production technologies, not promoting goods that empower poor producers, not shifting priority from consumption for conspicuous display to meeting basic needs — today’s problems of consumption and human development will worsen (UNDP, 1998, p.1).

Unfortunately, there are few institutions in this country that can offset the power of the powerful economic stakeholders and the consumption patterns that they rely on. Under the banner of free enterprise and liberal capitalism, the economic system in this country and others has become the 800-pound gorilla in our midst, and the joke goes like this: Q: What’s that 800-pound gorilla doing in our living room? A: Whatever it wants. 

I am not arguing that some different sort of economic system should replace capitalism, nor am I suggesting that consumption is necessarily bad. In fact, that same U.N. report previously quoted has this to say on the first page: Human life is ultimately nourished and sustained by consumption. Abundance of consumption is no crime. It has, in fact, been the lifeblood of much human advance (UNDP, 1998, p.1). I do, however, wish to point out some clear problems with some of the characteristics of the current system. In some ways, I suspect that economic stakeholders like corporations and the marketing industry they rely on, in their efforts to promote consumption, have simply gotten too successful. As the U.N. report clarifies, The real issue is not consumption itself but its patterns and effects (1998).  And these patterns and effects have ramifications for society that reach psychological and cultural levels.

Modernity and the Rise of